Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders.
Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custon design processing Activity Rate $ 18 per direct labor-hour $ 184 per order $ 264 per custom design $ 434 per customer Custoner service Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months: Standard Custom Model Design 16 Number of gliders Number of orders Number of custon designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider 2 2 34.00 30.50 $1,600 $2,320 $ 448 $ 576 The company's direct labor rate is $20 per hour. Required: Using the company's activity-based costing system, compute the customer margin of Big Sky Outfitters. (Round your intermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.) Customer margin 304
Step by Step Solution
★★★★★
3.46 Rating (159 Votes )
There are 3 Steps involved in it
Step: 1
Customer Margin 722 Answer Workings Standard Custom Total Standard C...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started